Strategic Management

CASE STUDY - Steinway and Sons

9th April, 2016

Submitted by:
Naeem ul Hassan
01-222142-026
MBA- Weekend

Sources of Brand equity for Steinway

Strategic Management
Steinway & Sons - one of their major strength and value addition is their
brand equity, which is built into the long established and traditional brand
identity and the perceived brand quality and image of the Steinway
pianos.
The Steinway piano over the years has been identified as one of the topline premium and high priced piano with a market niche and high market
share. Their Quality and differentiation have been the key strategic
elements in the brand strategy of Steinway, which has been very
successful and made them pioneer in the higher end markets.
This strategy should not be diluted. This identity of Steinway pianos
should be maintained and kept separate from other brands.
At the 1867 Paris Exhibition - The jury awarded Steinway the prestigious
Grand Gold Medal of Honor for excellence in manufacturing and
engineering.

SWOT Analysis
Strengths
Steinway and Sons have an established brand reputation of quality
and durability
There are minute differences between the sound of each crafted
piano which allows for differentiation and customization of the
product
The Steinway Concert and Artist program has around 850 artists
whom choose the Steinway and Sons piano

Weaknesses

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Strategic Management
The durability and quality of their products limits the concept of
repeat buyers and brand loyalty
The average customer is over 45 years old and earns in excess of
$100,000/year
With the introduction of the Boston piano line, Steinway and Sons
image took a step away from tradition
Growing technology and innovation has taken toll on traditional
pianos; they have been replaced by keyboards and other computer
technology
Opportunities
Establish a larger customer base in Asia to increase market share
Steinway and Sons could increase their industrial market by offering
discounts to universities or concert halls and/or being more
customer service oriented
Using innovative technology, Steinway and Sons could potentially
increase markets by appealing to lower and middle class purchasers
with low to mid-priced products
Threats
With the expansion of Asian manufacturers, global market share is
no longer being controlled by American manufacturers
There are levels of inexperience of the current younger owners/CEOs

Business Level Strategy

Steinway should continue its high end niche strategy by brand extension
strategy and also should start marketing its pianos more aggressively. As
the market is more favorable now, and more focus should be on the
growing Asian market will give higher profits.
The Pricing strategy needs to be modified as the Pianos are costed very
high. Check to be made on the Production Control system to reduce the
cost of the Pianos. Poor executive management and poor customer service
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Strategic Management
ensued; potentially damaging the Steinway brand should be given more
concentration for areas of improvement.
Promote the uniqueness in sound of each Steinway piano by leveraging
the existing relationships with current professional musicians and
aggressively seek to forge the relationships with them. The Goal of the
new leadership team must be propagated from Production shop floor to
the boardroom floor.
Stretching the Brand
Steinway and Son's which has a good brand equity should maintain the
reputation of its existing brand and should focus more on implementing
brand extension strategy.
Steinway with a proper brand extension strategy, consumers can make
inferences and form expectation as to the performance of a new product
based on what they already know about the base brand itself.
Different brands may be designed and marketed to the market segment,
keeping in mind to design a brand portfolio there by aid in maximizing
market coverage, by clearly differentiating each brand.
They should focus more on the growing sales by maintaining quality in the
niche market segment by reinforcing mid-priced Boston and introducing
new lower-priced piano to Asian market to compete against low-price
competitors.
Low Price addition to the product line.
They should introduce another low prices line of pianos below the Boston
Line. The mid-priced instrument manufactured by Steinway, Boston piano
made by Kawai in Japan to specifications described by Steinway.

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Strategic Management
Although Boston piano line represented a significant break with tradition,
these mid-price Pianos are mainly for the customers who were not yet
ready to acquire a Steinway. Moreover, Boston made big revenue over
600% from 1992 to 1994. To make more money Steinway needs lower
price of piano than Boston.
Hence they should introduce new lower-priced brand through cooperation
with other Asian manufacturer except for Kawai for technology protection.

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